Credit Check Basics

Every time someone checks your credit a little troll under a bridge gives you a demerit, right? Wrong! (He lives in a bungalow.)

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There are lots of people who might check out your credit score and history: a landlord, a lending agency, even a potential employer. Some peeks into your report are counted against your score, which is nonsensical, but true.

Here are the types of credit checks and how they affect your score over time:

Hard Inquiries: Checks into your history that do harm to your score are generally those initiated by an outside agency looking to make a lending decision. Banks, a credit card company, a mortgage broker - all of these people are taking a risk by giving you money. They check your history because they want to evaluate that risk. Your years of on-time payments will prove to them that you're a worthy risk. Or your years of late payments will encourage them to jack up the interest rate on the loan they give you.

These hard inquiries will lower your score by just a little bit and will only stay on your record for up to 24 months. If you are interested in buying a home or a car you should really lay off the store credit cards and personal loans. All these checks into your history will just make it look like you're borrowing money all over the place.

Soft inquiries: Checks into your history that do NOT harm your credit score are usually initiated by you...in a roundabout way. A future landlord may look at your history to see if there are any evictions or seriously late payments. Again, they are weighing their risks.

Because these checks can occur without your permission, they don't take your score down. Can you imagine? What a way to get back at your enemies! Just credit-check them all the way down to a 400 and screw up their financial future.

Checking your own score also will not affect the number. Use a free and reputable site like Credit Karma to do that, they're legit. And FREE. Don't ever pay for something that belongs to you anyways. So have at it! Check your score until your little heart's content.